Monday, November 8, 2010

Waste, Waste Everywhere, and Not a Program to Cut

The chart to the right shows the project federal deficits for the next ten years if the government does nothing about current spending trends. This chart scares the living crap out of me, and helps explain the fear paralyzing the business community and the reason that gold and other precious metals, which many people consider to be the only real money, are hitting all-time highs.

Politicians are poor stewards of taxpayer money, and focus more on funneling goodies to their constituents and districts than worrying about whether tax dollars are being wisely spent. Failed federal programs do not get cut, they just require more and more funding. Is this the way free enterprise works? Of course not. No one in their right mind would run an organization this way, except our civil servants.

All of my adult life I've heard politicians on both sides rail against deficits, but precious few practical suggestions materialize on what to cut. Even after the most recent election, which to my mind as centered around public unhappiness over the excesses of the past two years, I've heard few specifics on spending cuts. Well, let me provide a few suggestions:

Stop using “emergency” spending loopholes to get around budget rules.

Put every federal transaction and contract online in real time so the public will have transparency into how their dollars are being spent.

Freeze Federal hiring at current levels along with employee salaries and benefits. Only replace employees as they leave.

Block grant education funding and welfare to the states.

Sitting Congressmen and Senators should not be able to name buildings or other monuments to themselves, and none should be named for them while they are still living.

Stop defending Western Europe. They are wealthy; let them defend themselves. The Soviet threat is long dead, and there's no need to have thousands of US troops in Germany.

Close down most of the other foreign bases except those that provide a true strategic interest.

Get our troops out of Iraq and Afghanistan.

Eliminate obsolete weapon's programs.

Eliminate earmarks.

How many kilowatts of power does the Department of Energy produce or barrels of oil? This department should be eliminated.

How many children does the Department of Education actually educate? This department should be eliminated.

Repeal the Davis-Bacon Act which artificially inflates the cost of federal construction contracts by mandating workers are paid no less than local prevailing wages.

Phase out farm subsidies that distort the market by incentivizing farmers to over or under produce certain products.

Repeal Obamacare. The costs of this program have been deliberately underestimated and are another entitlement program set to spiral out of control.

Revamp the Financial Reform Act to eliminate the new, unnecessary bureaucracies. New bureaucracies will not fix the failings of the old bureaucracies and just run up the taxpayer's tab for little benefit.

Privatize the US Post Office, Amtrak, the Corporation for Public Broadcasting, and National Public Radio.

Close down Fannie Mae and Freddie Mac.

Reduce foreign-aid and let other countries pick up the lion's share of the tab for the UN.

The most pressing problem is entitlements-- Social Security, Medicare and Medicaid. Benefits must be reduced or we will be bankrupt as a country. Since this is political dynamite, the best that can be hoped for is a cap on growth or a freeze on increases.

For programs not directly eliminated, impose a 10% across the board cut that will encourage administrators to run their departments more efficiently.

I have barely exposed the tip of the iceberg with these suggestions. What other ways can you think of to help our elected representatives figure out how to cut spending?

Nice chart, makes me real hopeful... (if anything I expect it will be even worse.)

I shake my head at all the ridiculous things I see money being spent on where I live. Here are a few examples:1. The secretary of state has their name emblazoned on the signs. That means those signs need to be replaced whenever a new SOS in elected.2. Road signs that say '80 percent of funding for this project was from federal dollars'. They must realize citizens are tired of all the spending,so they want to scream out 'hey, you didn't pay for this with your local tax dollars'. Those signs cost a lot of money.3. We have a water tower for the zoo. It used to be repainted every time a new mayor was elected so the official could have their name on the tower. Again huge waste of time and money.

What will we probably go toward may be more like smaller, less powerful countries, but more of them. I sincerely do think that once things get to this level, the only option is to split the tribe and try something else. So long as this can be done voluntarily and without bloodshed it's not a bad idea.

I agree with your list and more. Hopefully the sentiment of the country is starting to come around and something can be done. The current administration thinks the election tsunami was only because they didn't explain their message clearly. They are not ever going to get it. I hope the new congress just pushes the old bunch aside and moves forward

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About Me

I am a fifty-something year old father of three who has been happily married for 25 years. I am interested in money management, and software development. I've been a steady investor for all of my life and have typically been successful when I've followed my own instincts, and been less successful when following the advice of others. Some of the people I look up to in the investment world are Warren Buffett, John Templeton and Jack Bogle.